Oil futures: Prices retreat as US flags further SPR release

Quantum Commodity Intelligence – Crude oil futures Tuesday were in retreat amid reports the US would authorize a further release from its SPR, while growing concerns over demand, including from China, also weighed on market sentiment.

Front-month December ICE Brent futures were trading at 90.18/b (1840 GMT), compared to the intraday high of $92.66/b and Monday's settle of $91.62/b.  

At the same time Dec22 NYMEX WTI was trading $82.25/b, versus Monday's settle of $84.53/b, while Nov22 was trading at $83.05/b heading towards expiry.

According to Energy Aspects founder Amrita Sen, speculation that the White House could respond to the OPEC+ cuts with further releases from the Strategic Petroleum Reserve continues to keep oil markets on edge.

"They are weighing up an emergency release of potentially as much as 100 million barrels," Sen told CNBC. "You just don't know, given the uncertainty."

Market watchers said any further releases are likely to be announced in smaller tranches, possibly in the 10-15 million barrel range.

The initial sale would likely be the remaining 14 million barrels from the 180 million-barrel sale that started in May, although further tranches could also be released.

"The country's strategic reserves have already declined to their lowest level in almost 40 years. Having started the year at just shy of 600 million barrels, they now amount to only somewhat more than 400 million barrels. This means that any further scope is limited," said Carsten Fritsch of Commerzbank.

Meanwhile, the US Energy Information Administration said late Monday that oil production in the Permian Basin would rise by 50,000 bpd to a record 5.45 million bpd in November, according to its latest production outlook.

The agency also sees Bakken rising by 22,000 bpd to 1.19 million bpd and Eagle Ford shale by 18,000 bpd to 1.22 million.

China has unexpectedly delayed the publication of key economic data due Tuesday as the Communist Party comes together for its five-year gathering against the backdrop of a faltering economy.

The country's National Bureau of Statistics marked the keenly-watched GDP growth figure as "delayed", along with quarterly retail sales, industrial production and monthly unemployment figures.